Moody's affirms AMP ratings

Moody's Investors Service has affirmed all the ratings of the AMP Group, with a negative outlook on its long-term ratings.

Short term ratings for the group remain stable.

This follows the completion of the demerger, which separated the Australian and UK businesses and involved a successful rights issue.

Moody's said while the uncertainty and transaction risks surrounding the completion of the demerger process had been removed there was still uncertainty regarding AMP's capital plans and plans to reduce external debt.

Additionally, as a result of Henderson Holdings Group's (HHG) successful share offering, AMP will be released from its stand-by commitment on the Convertible Loan Notes and its 15 per cent stake in HHG will be diluted to approximately 11 per cent.

"As indicated, there is continued uncertainty over the status of the income securities, given the news that AMP has received a statement of claim from two income securities holders, who seek a declaration that the demerger has caused an event of default," the rating agency said.

"Moody's will continue to monitor the situation and notes that if a court were to ultimately find that a default had indeed occurred because of the demerger, it is possible that ... the company might be forced to accelerate repayment of its senior corporate debt."

AMP is believed to have in place a combination of internal and external resources to refinance these obligations.

Moody's said while the requirement to accelerate payment on its securities may be remote, it could have a negative impact on the group's rating.

In future following the demerger, the ratings on HHG, AMP's former UK businesses, will be commented on separately, Moody's said.

The current ratings include Baa3 insurance financial strength for National Provident Life and Pearl Assurance, Ba3 subordinated debt for NPI Finance, all with a negative outlook.